I also suggest CoreAVC, 720p plays fine (1080p probably wont, but I have not tried to). This is a waste anyway, because the NC10's display resolution is too low for 720p anyways. But I usually "obtain" movies/anime in 720p, so I gave it a try.

CoreAVC is a proprietary Codec, so you'll have to fork out a few bucks.. oh wait, this is the internets!

i tried the latest CoreAVC (v. 1.9.5) on my NC10 with Windows XP and 720p videos did not play smoothly! i only testet mkv videos with x264 codec. i've never heard before that intel atom is capable of playing highly compressed 720p video. i don't need HD on my nc10 anyways